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23andMe CEO and Founder Anne Wojcicki

This is more like it.

A deal being announced today with Genentech points the way for 23andMe, the personal genetics company backed by Facebook billionaire Yuri Milner and Google Ventures to become a sustainable business – even if the company’s discussions with the U.S. Food and Drug Administration stretch on for years.

According to sources close to the deal, 23andMe is receiving an upfront payment from Genentech of $10 million, with further milestones of as much as $50 million. The deal is the first of ten 23andMe says it has signed with large pharmaceutical and biotech companies.

Such deals, which make use of the database created by customers who have bought 23andMe’s DNA test kits and donated their genetic and health data for research, could be a far more significant opportunity than 23andMe’s primary business of selling the DNA kits to consumers. Since it was founded in 2006, 23andMe has collected data from 800,000 customers and it sells its tests for $99 each. That means this single deal with one large drug company could generate almost as much revenue as doubling 23andMe’s customer base.

“I think that this illustrates how pharma companies are interested in the fact that we have a massive amount of information,” says Anne Wojcicki, 23andMe’s chief executive and co-founder. “We have a very engaged consumer population, and these people want to participate in research. And we can do things much faster and more efficiently than any other research means in the world.”

Alex Schuth, who heads technology innovation and diagnostics business development at Genentech, says he was drawn by the 12,000 patients 23andMe has recruited with the help of the Michael J. Fox Foundation, and by the physical data on those patients. “That is something unparalleled,” he says. “Obviously the goal for us for this collaboration is target discovery to find new medicines for patients in a disease-modifying sort of way.”

The deal comes at a critical time for 23andMe because in late 2013 the Food and Drug Administration told the company it could no longer return health information to its customers. This has hurt sales. It also makes it difficult for 23andMe to build its database and make it more appealing to large pharmaceutical companies.

The Genentech deal is not the first one with a drug company that 23andMe has done – it has had collaborations with pharmaceutical companies going back to the company’s founding. Last year it announced a collaboration with Pfizer to enroll more than 10,000 patients with colitis or Crohn’s disease in its database to look for genetic clues to the cause of those bowel disorders.

But the new deal shows the scale and power of 23andMe’s existing database (or, as 23andMe refers to it, community) in a way that others have not. Genentech, the U.S. unit of Swiss drug giant Roche, will make use of one of the biggest communities on 23andMe’s website: the one for Parkinson’s.

Wojcicki and her husband Sergey Brin (the two are now separated) have been very public about their desire to understand Parkinson’s, which runs in Brin’s family. 23andMe has signed up 12,000 Parkinson’s patients and 1,300 of their parents and siblings. These participants are amazingly willing to volunteer for research. In one study, one of 23andMe’s partners wanted to take a deep skin biopsy from 24 patients in 23andMe’s database who had a particular Parkinson’s mutation. Eight patients volunteered within 24 hours.

23andMe’s tests only scan the genome for known variations. Genentech wants to go deeper, and will pay to get full genome sequences – that’s all of a person’s DNA – for 3,000 Parkinson’s patients or their first-degree relatives. The goal, Schuth says, is to discover new targets for drugs and diagnostic tests. The companies have not yet decided who they will hire to do this DNA sequencing.

People who have bought 23andMe kits and agreed to donate their data to research (that’s about 600,000 of the company’s 800,000 customers) automatically consent for 23andMe to sequence their genomes. 23andMe says that it is also able to share anonymous and pooled data about their self-reported health traits without asking. But Genentech wants even more: it wants to look at health and genetic data on an anonymous but individual basis. For that reason, the company will have to ask customers if they want to enter the study.

One big question behind 23andMe’s business model has always been whether customers will be happy or upset when they find out that they realize they have paid to be used in for-profit research projects. “I’m sure some people will feel great, no problem, and some will feel cheated,” says Hank Greely, director of the Center for Law and the Biosciences at Stanford University. “And the reactions will form a bell curve.”

But Greely says those issues are unlikely to apply to this deal. The fact that 23andMe will be getting consent from participants makes things a lot cleaner. So does doing the study in Parkinson’s patients and their relatives, who have engaged with 23andMe partly for the purpose of doing disease research.

“When we've had people come in who have a disease, they are very clear that they want us to do whatever it is going to take to actually make a difference in their disease,” says Wojcicki. “They're just very, very clear about that. Do whatever it takes that's going to have an impact on my life or an impact on the lives of my children.”

One big question is when 23andMe will once again be allowed to let consumers in the United States access data about their health. The legality of 23andMe’s product has been a thorny question since the company was founded in 2006. Even at its peak, 23andMe could not analyze tests sent from the state of New York because of the laws there. (New York residents could send their 23andMe kits in from somewhere else.)

In 2012, 23andMe announced that it had raised $50 million in funding from investors including Google Ventures, Facebook billionaire Yuri Milner, and New Enterprise Associates. Wojcicki said that the company planned to grow its customer base to 1 million, significantly expanding its ability to do research. 23andMe began to run advertisements that emphasized the health benefits some customers had gotten from its tests.

At the same time, 23andMe was supposed to be trying to work with the FDA to figure out how to clear its test as a medical device. But in November 2013 the FDA sent 23andMe a scathing, public letter, saying that the company had been radio silent with regulators for six months and telling it to stop giving health information or risk an enforcement action. I said at the time that 23andMe might have “the single dumbest regulatory strategy I have seen in 13 years of covering the Food and Drug Administration.”

Wojcicki ticks off a number of steps that 23andMe has made to fix its relationship with the FDA. She hired Kathy Hibbs, from Genomic Health, a maker of cancer diagnostics, to manage the company’s relationship with the regulator. And 23andMe has been in constant dialogue with the FDA since submitting an application last May.

“I am hopeful for 2015,” Wojcicki says. “It has been quite a transformation for the company, to really change and go through this entire process.”

There is really no telling, though, how long it will take to get the consumer business on track and to get FDA approval. If the database of genetic and health information 23andMe has built were not already valuable, the company would be facing a dicey future.

But if Genentech is willing to pay for access to the data, it may well be valuable enough now. There are other indications that 23andMe, while not as big as Wojcicki dreamed, is big enough to matter. One analysis using patient-reported data predicted asthma as a side effect for Genentech's cancer drug Herceptin. An analysis presented at the American Society for Human Genetics last year said that genes related to drugs that had been successful were present in 23andMe’s database. Reset Therapeutics, a small South San Francisco biotech, is using 23andMe’s database to hunt for rare disease drugs.

Eventually, 23andMe will need to start growing its genetic database again, and doing that will require reigniting the consumer business. But it can afford to wait. Wojcicki says that she has always been playing a long game.

When she first started 23andMe, she says, someone at a Big Pharma company told her that if she really wanted to make a difference in the world, she would be ready to work for 10 years with the FDA to define what direct-to-consumer genetic testing would look like as a business. If not, if she wanted to sell the company quickly, she’d need a totally different strategy.

“At 23andMe, we made that choice then,” Wojcicki says. “We are very much in it for the long haul.”